@ both Adams

First Adam: Funny, most people consider Linux to be the OS you want running in a cupboard.

Second Adam: This service is running an app on one system and displaying it remotely on the other. I fail to see how that's the other way around from running an app on one system and displaying it remotely on the other.

@matt

Compressing down to 20% is easy - beefy systems can do live 1080p video (over 1000mbit) into 12mbit already, with almost no perceptible loss - about 1% the size of the original. Most games would be much more compressible than that too, due to the lack of film grain, clean edges to shapes etc. At 1024*600 25fps you'd be looking at approx 1.5mbit for pretty seamless quality, 1mbit for good enough.

T5 labs does this and actually has a proper business plan.

Another British company - T5 labs - does something very similar but is building it's business around partnerships with cable tv companies and game publishers.

At some point in the near future you'll be able to play games running on a remote server by just plugging a controller or a mouse and keyboard into your cable tv set top box. The stb tunes into a lag free mpeg2 stream of the game.

@lag free?

I'm no expert but I believe this is how these game streaming services encode lag free:

A standard video encoder does not know what is coming in the next frame - it could be a minor change or a cut to a new scene - so it must scan each frame and compare it to the previous frame to discover the differences. This scan for differences is the most time consuming part of the encoding process and introduces lag.

With a video game streaming service like the one above, a special encoder hooks into the game code and video driver so that it knows in advance what parts of a frame have changed from the previous frame. This dramatically reduces lag, allowing even fast action games to be played via a compressed video stream.